Start with the amount you need to keep
A client budget and your take-home target are different numbers. If a payment service deducts a fee from the invoice, quoting the target itself leaves you short. Reverse invoicing answers a precise question: what gross payment produces a chosen payout under a stated fee schedule? It does not determine what a client will accept or whether a separate surcharge is permitted.
Write down the target before opening the calculator. Also decide what “keep” means. A payout after payment fees still has to cover your software, time, business costs and any applicable taxes. If those costs matter to the quote, include them in the target instead of assuming the payout is personal income.
Why adding the percentage fails
Consider an illustrative fee of 3% plus $0.30 and a desired payout of $500. Adding 3% and $0.30 produces a $515.30 invoice. But the percentage is charged on $515.30, not $500. With the percentage fee rounded to cents, the deduction is $15.46 plus $0.30, leaving $499.54.
For a single percentage rate r and fixed charge f, the starting formula is gross = (target + f) ÷ (1 − r). Here, $500.30 ÷ 0.97 is approximately $515.7732. An invoice of $515.78 leaves $500.01 under this rounding convention. A provider that rounds fee components differently can settle a cent differently.
Use the formula within its limits
The formula assumes a constant percentage and a fixed fee. Minimum charges, tiered percentages and fees applied to different bases require additional rules. Do not add two percentages together when one applies to the original payment and the other applies only to the remaining balance. A total rate of 100% cannot be solved for a positive payout with this formula.
In the freelance calculator, choose Reverse invoice, enter the desired payout, then replace the preset with the fee shown in your account or contract. Check the fixed charge and any currency-conversion assumption. FeeMargin searches cent-denominated invoice amounts using its modeled fee rounding, so its answer can differ slightly from an unrounded spreadsheet formula.
Before you send the quote
Save the assumptions alongside the quote and confirm whether the customer will pay in one transaction or several. Two payments may incur two fixed charges. Use the result to set a clearly communicated total price; it does not establish a right to pass a payment surcharge to the customer. Check the applicable agreement and rules separately.